Earlier this year, the U.S. Department of Labor (DOL) passed the âpersuader ruleâ that closed a major loophole, which has for decades allowed employers to hire attorneys and consultants to secretly assist them in what is politely referred to in the industry as âunion avoidance.â The goal of this activity is to persuade and prevent workers from organizing unions.
The new rule did not try to make the consultantsâ and attorneysâ practices illegal, or regulate the types of activities that employers and consultants could engage in; it was simply intended to provide transparency to workers who are the subject of a coordinated anti-union campaign. But last week, a Texas federal district court judge issued a nationwide injunction prohibiting the DOL from implementing the rule.
The persuader rule reinterpreted the âadviceâ exemption in Section 203(c) of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA), which had only required disclosure when employers hired outside consultants who directly communicated with employees. Under the previous interpretation of the exemption, the vast majority of employers who hire labor consultantsâsometimes referred to as âunion bustersââand the consultants they hire have been able to evade their filing requirements and remain in the shadows by having these consultants work behind the scenes.
As a result, the workers are never privy to who is coordinating the anti-union campaign or how much their employers are spending on it. It isÂ estimatedÂ that employers in 71-87 percent of organizing drives hire one or more consultants, yet because of the massive loophole in the law, only 387 agreements were filed by employers and consultants.
The LMRDA was passed to deal with theÂ persistent problem of employersâ interference with workersâ rights to organize. A 1980 Congressional Sub-Committee Report described the long history of employers using
outside assistance to combat union organizing efforts since well before federal legislation to regulate labor-management conflict was enacted. Private detectives and âprofessional goonsâ were hired by employers, who were also assisted by law enforcement personnel. Anti-union tactics included spying, blacklisting, firing, physical intimidation, violence, and jailings.
Twenty years earlier, in the Final Report preceding the passage of the LMRDA, Congress that the outside âspyâ and âprofessional goonsâ had morphed, and âa new and more sophisticated outsider had appeared: the âlabor relations consultant.â â As a result, the 1959 Act required employers and any consultants they hired to file a report if they made any arrangements or spent any money âto interfere with, restrain, or coerce employees in the exercise of the right to organize and bargain collectively through representatives of their own choosing.â
The new persuader rule, which covers all agreements and payments after July 1, was intended to close this loophole. The rule requires employers who hire anti-union consultants (and those consultants hired) to disclose to the DOL the agreement and the amounts paid. It would not require disclosure of what the consultants said or any legal advice sought. It is akin to a requirement that political campaign ads disclose who is paying for the ad so that people know who is behind the message they are receiving.
But now, under last weekâs injunction, all of that is in jeopardy.
âThis was one of the most one-sided orders I have ever seen,â explains Seattle University School of Law Professor Charlotte Garden. âThe court found every one of the theories brought by the plaintiffs likely to succeed.â
The suit was brought by the National Federation of Independent Business, the Texas Association of Business, the Lubbock Chamber of Commerce, the National Association of Home Builders, the Texas Association of Builders, and a group of GOP-controlled states. Some of these organizations were concerned that their current activities of providing anti-union seminars and materials would require them to file reports identifying themselves as labor relations consultants.
Perhaps the most surprising group to take a side in this case was the American Bar Association (ABA), whose mission is âTo serve equally our members, our profession and the public by defending liberty and delivering justice as the national representative of the legal profession.â The ABA cited attorneysâ ethical rules for their opposition to the DOL Rule, and said, âby imposing these unfair reporting burdens on both the lawyers and the employer clients they represent, the proposed Rule could very well discourage many employers from seeking the expert legal representation they need, thereby effectively denying them their fundamental right to counsel.â
This coalition of business and attorney groups and states brought forward a number of arguments, from the DOL lacking authority to pass the rule to the rule exceeding the DOLâs estimated compliance costs by $59.99 billion over 10 years. (The DOL estimated the rule would cost all employers and consultants a total of approximately $826,000 per year; the plaintiffs estimated it at $60 billion over 10 years.) Additionally, in line with the growing use of the First Amendment against government regulation of business, the plaintiffs argued that the rule violated the employersâ, lawyersâ, and consultantsâ free speech, expression and association rights. The Judge concluded that some union busters may not offer their services as freely, and some attorneys may leave the field, if their identities and the terms of their arrangements were disclosed.
There is a great dissonance to the judgeâs extreme sensitivities to the rights of lawyers, union busters and employers to have their anti-union activities shrouded in complete secrecy, when the new rule was intended to protect workersâ rights. Not mentioned anywhere in the judgeâsÂ 86-page orderÂ is any discussion of workersâ rights to know who is really speaking to them when they are forced to sit in on an anti-union captive audience meeting. Further, there is no discussion of the value to workers of being able to test the employerâs claim that it does not have money to provide extra pay or benefits, when it might be spending tens or hundreds of thousands of dollars on anti-union consultants.
What was intended to be a rule protecting workersâ rights has been stopped from taking effect by a judgeâs order that was solely focused on the rights of union-busters.
This article originally appeared in inthesetimes.com on July5, 2015. Reprinted with permission.
About the Author: Moshe Marvit is an attorney and fellow with The Century Foundation and the co-author (with Richard Kahlenberg) of the book âWhy Labor Organizing Should be a Civil Right.â